RBI Eases Auto-Debit Rules: No OTP Needed Up to ₹15,000
In a major step towards simplifying digital payments, the Reserve Bank of India has relaxed its guidelines for recurring transactions. Under the revised framework, auto-debit payments of up to ₹15,000 can now be processed without requiring a One-Time Password (OTP) for every transaction, provided the user has already registered and approved the mandate with their bank or service provider.
This move is expected to benefit millions of users who rely on automatic payments for their daily financial commitments. It applies to a wide range of services, including OTT and app subscriptions, mutual fund SIP instalments, insurance premiums, credit card bill payments, and utility services such as electricity, water, and broadband bills. Earlier, even after setting up auto-debit, users had to authenticate each transaction using an OTP, which often led to failures due to delayed messages, poor network connectivity, or unavailability of the user at the time of processing.
Such disruptions frequently resulted in missed payments, service interruptions, penalties, and even failed investment contributions in the case of SIPs. With the removal of repeated OTP requirements for transactions within the ₹15,000 limit, the entire payment process is expected to become smoother and more reliable.
However, users will still receive prior notifications before the debit is processed, giving them the option to cancel or modify the payment if needed. For transactions exceeding ₹15,000, additional authentication like OTP will continue to be mandatory, ensuring that security is not compromised.
Overall, this decision by the RBI strikes a balance between convenience and safety, making recurring digital payments faster, hassle-free, and more efficient for users across India.
